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> The medication was given every three weeks for six months and cost about $11,000 per dose. That’s an $88,000 treatment for the medication alone. Given the ap

> The medication was given every three weeks for six months and cost about $11,000 per dose. That’s an $88,000 treatment for the medication alone. Given the apparent success of the drug, is it expected for the price to drop as the volume of patients spike?

georgeburdell 4y ago
This is why although I’ve almost got enough money to retire (~20x yearly expenses) but I’ll keep on working for another decade or two. All of these whiz-bang new treatments are going to be expensive. The most expensive medical procedure right now is a heart transplant at about $1M. Then there’s the $10k/mo for a nursing home
- ta988 4y ago
  Is that the real price of a nursing home in the US? Who can afford that?
  - horsawlarway 4y ago
    Yes - that's not unreasonable for a full time care facility for something like dementia or Alzheimer's in the US (it's below what we paid for my grandmothers). If you're lucky - they have long term care insurance, and that covers most of the expenses for approx 2 to 10 years (depending on how old the insurance is - it's getting harder to find long plans, and they're all getting significantly more expensive as it turns out more folks needed them). Otherwise... you spend everything, and then your kids pay. We split my grandmothers down the middle - my mom's had insurance, we covered my dad's.
    - spywaregorilla 4y ago
      I'd rather just die. Throw a party. Tell my kids they're getting a ton of cash. Say good bye on happy terms. Vs. a miserable decay for everyone involved at huge expense. It's not worth it. Forget the money. The emotional toll is large and for whose benefit?
      - Merad 4y ago
        Even ignoring the fact that human euthanasia is illegal in most of the US, it's rarely that easy. Both of my paternal grandparents lived into their 90s but suffered from mental decline (different forms of dementia) and died as shells of their former selves. If you could have spoke to either of them at the end of their lives but with their full mental capacity, I suspect they would have said that they'd have preferred to die earlier rather than live through that decline... but in reality by the time anyone understood how severe their mental decline would become they were already well past the point that they could have consented to euthanasia. In theory you could presumably have some kind of system where a person of sound mind could that said, in effect, "if my condition declines beyond _____ then I want to end it," but doing so would be an incredibly touchy subject even if euthanasia was legalized. Unfortunately there is a very real potential for such a directive to by abused by people motivated by greed (gimmie that inheritance) or who simply don't want to deal with an aging relative who needs more help but hasn't reached the point where their euthanasia directive should be triggered.
        LinuxBender 4y ago
        Assuming forethought one can set up a living trust. I have one. If I can no longer consent then a family member I designated can consent for me. It isn't without risk and requires a lot of trust.
        nicoburns 4y ago
        > but doing so would be an incredibly touchy subject even if euthanasia was legalized. It would, but the alternative is to make people live though this mental decline as we currently do. IMO it would be well worth the risks to be able to ameliorate the end of peoples lives. My plan is to end my life well before I hit severe mental decline (not “if it gets worse”, with all the ambiguities that entails). If that cuts a few years off then a be it!
        saiya-jin 4y ago
        It really, really doesnt have to be that complex. If people are religious nuts to believe suicide would bring them to some religion's hell (it won't, since it doesn't exist even if their variant of god(s) would exist), there are tons of ways to pass out rather quickly and not fulfill that criteria, and not bother anybody with the process (various car/train jumpers or suicide-by-cop doers whom I consider utter selfish a-holes). Walk out to a storm or blizzard not equipped for it. Go fight a bear or lion or crocodile. Go for a swim that you can't come back from. Do some high risk type of adventure that in high age is not even discussed. If you make it, great experience, move to next one. The list is literally endless and can be done in some form even by quadriplegics. It allows you to plan goodbye and closures, wills etc. The fear and pain and suffering is concentrated into such a tiny sliver of time compared to dying discussed its uncomparable. It just takes balls to accept that this is it, what mattered for you in life is over, and now its time to think about your closest ones and not yourself. Like a breakup, many will continue living in bad relationship since its a small amount of pain and evil every hour, every day. Instead of standing up and walking off to uncertainty and freedom.
    - toast0 4y ago
      Medicaid will pay for nursing homes (if medically justified) once you run out of money; but the per diem isn't that much. Apparently a lot of nursing homes will commit to accepting medicaid reimbursement for continuing care if you can commit to paying N years first. I've heard usually 2, sometimes 3. If you can swing that, your kids won't have to pay, or they'll pay for incidentals, but not the whole thing. There are homes that just straight up take medicaid, but they review poorly; it's not enough to pay decent staff at reasonable levels, so there you go. What I've heard about long term care insurance is you can't really buy a plan with useful coverage anymore. The old plans were good as long as the insurer remained solvent, but many didn't.
    - WalterBright 4y ago
      My father had long term care insurance. He got Alzheimers, and went into a nursing home, and passed after 3 years. The insurance covered most of nursing home fees. I did some math on the premiums he'd paid for the insurance, and the payout. It was a break even. In other words, putting the premiums into an HSA would have financially worked out a lot better.
    - greedo 4y ago
      "Otherwise... you spend everything, and then your kids pay." That's incorrect. With Medicaid, the recipient is require to spend down their assets to a small amount, then Medicaid will pick up the remainder. The recipient's children aren't on the hook for anything. Of course, they won't receive any inheritance since the estate of the recipient has been drained prior to Medicaid.
      - horsawlarway 4y ago
        This is wrong. Or rather, correct, but only in certain states, and for certain facilities. IMD over 65 is only offered in some states, and have strict requirements for facilities that accept medicaid (not all that many do near us). In our case, the waiting time was about 3 years for a room in the facility closest to us. Alternatively, there was an option about 4 hours away. Worse, both medicaid facilities we looked at were... bad. Frequent complaints about abuse, very high rates of staff turnover, very little stimulation for residents (one was basically a single old tv on the wall in a cinderblock room - it looked basically like prison). So yes - Medicaid will cover some costs in some cases, but really - the kids end up paying.
  - MauroIksem 4y ago
    Yes it sounds crazy but when i was kid i worked as waiter at a nursing home and heard it cost 8k a month. That was nearly 20 years ago.
  - qgin 4y ago
    You either have enough to pay or you pay until all your assets are exhausted to $0 and then Medicaid takes over.
    - GordonS 4y ago
      I'm guessing Medicaid isn't going to pay for the kind of nursing home that costs $10k/month?
    - ok123456 4y ago
      Medicaid will force you to sell your house once that happens.
  - spfzero 4y ago
    It's the type of nursing home. If you are in an "assisted living" home, it is less. As a data point, maybe $5800/mo in CA, which includes food and various social programs.
- qgin 4y ago
  If you need a heart transplant, are you planning to self-pay that?
  - georgeburdell 4y ago
    I have health insurance but I don’t trust some company to not dither when time counts
- msandford 4y ago
  The other thing you can do is setup a trust for yourself so that you're broke on paper long before the trust runs out of money. I don't know if it's ethical but it's legal.
  - hughes 4y ago
    What's unethical is a system that completely drains a person's wealth for getting sick.
    - caddemon 4y ago
      Certainly this happens for procedures that should be cheap, and nursing homes are also a huge issue. But in the current discussion it's not clear to me that something like a heart transplant should be cheap. Development of a novel treatment can be very expensive and sometimes involves scarce resources.
      - trasz 4y ago
        In most developed countries heart transplants are literally free. That's what proper healthcare system is for.
        caddemon 4y ago
        The US alone does ~2/3 of worldwide heart transplants, I think there is a tradeoff here. It's also not actually $1 million out of pocket for most people.
        trasz 4y ago
        Only because you are looking at the country total. Adjusted per capita, US has 7.6 transplants per million population, while eg France has 6.2. Which means, it’s pretty close.
        caddemon 4y ago
- mkoubaa 4y ago
  Pay lots of money to spend more of your life dying
- robocat 4y ago
  spend a decade of your life to possibly save a few years later? If you are “investing” your time for someone else, perhaps you could just give them your time directly instead?
ta988 4y ago
Something I saw in drug pricing conferences is that there is a push to price drugs according to how much personal and social benefit they provide and how much a person would be willing to pay to extend their life or resolve a condition. An extreme example for that model, if a drug allow a kid to survive and have a productive life it can be priced millions whereas a palliative drug could be much cheaper. This has nothing to do with research and cost of development anymore (if it even ever did).
- klyrs 4y ago
  I met a researcher once who was doing what appeared to be groundbreaking research on cancer care. He had this beautiful, tear-jerker story about losing his wife that cast a rosy, altruistic hue on his research. When he was asked what the device would cost, he cheerily replied "whatever the market will bear." That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. Dude was living off of government research grants.
  - brigandish 4y ago
    > That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. What should it cost instead? > Dude was living off of government research grants. Let's imagine his work comes to fruition. The drug is expensive but efficacious - is this not a good thing? Should the government have not helped fund this drug because now it's expensive? The alternative is a world without that drug and without as much incentive to produce the drug. I'm not sure that's a good trade.
    - chris_wot 4y ago
      I’m sorry, but that’s a non sequitur. The alternative is not that the drug wasn’t produced. It is that the drug wasn’t developed by private enterprise.
      - brigandish 4y ago
MauroIksem 4y ago
It's cheaper than other chemos..my mom has breast cancer and her chemo according to insurance cost 65k per infusion every 3 weeks.
- Gordonjcp 4y ago
  That's *insane*. Here in Scotland each dose costs the NHS at most a couple of hundred quid, plus about that again to administer. None of that is paid by the patient.
  - sirsinsalot 4y ago
    It is crazy what the incentives do in the US. It is a bit like car insurance here, which keeps rising because insurance companies keep edging the cost of a claim upwards (courtesy cars at extortionate rates, repair, ...) because there's no insentive to keep costs down or not profiteer. With the NHS's buying power for drugs, they can get a little bit nearer a sensible margin from the supplier rather than the insane US costs underwritten by inflationary insurance.
dangle1 4y ago
Probably not. That's an average-to-low price for a monoclonal antibody in the US, and many people with chronic (non-cancer) conditions pay that price every few weeks to remain healthy under something like a health-as-a-subscription model.
qgin 4y ago
Price is only slightly related to production costs. It’s much more about all the work that goes into getting something like this from basic science to trials to approval (and all the other drugs that fail along the way). In the current model, pharma only stays in business by recouping all of the during the patent protected period of any drug that makes it to market.
adamredwoods 4y ago
This price won't drop, it isn't common enough and still in clinical trials.
yumraj 4y ago
I would actually expect the opposite. If the drug is approved then the price would go up several times.
bearjaws 4y ago
Chemotherapy for 3-4 months is around $200,000 - $400,000. You will not see a price reduction, if it doesn't require chemotherapy or significantly reduces the number of rounds of chemotherapy, this drug will cost $150k+ for full treatment. All of this assumes side effects are better than chemotherapy. Given chemotherapy care plans are some of the most arduous, it will be hard to be worse than chemo.
- gruez 4y ago
  > Chemotherapy for 3-4 months is around $200,000 - $400,000. Is that the american price or the "other developed countries" price?
mattmaroon 4y ago
Generally drugs that cure a condition cost MORE than the pre-existing treatments while under patent protection with no viable competitors. There’s only one source and you’d rather cure the disease with a pill so you’ll pay more. Market dynamics don’t come into play when there’s only one. If competitors appear or after patents expire it may get cheap, but the cost early on will have no relation at all to production costs.
weezin 4y ago
No, the prices for drugs don't follow the same fundamentals that a normal economic market does. If you want to learn more about pricing in healthcare the "Pricing, Value, and Ethics" lectures for this course is really interesting. https://openlearninglibrary.mit.edu/courses/course-v1:MITx+15.482x+1T2019/course/ https://openlearninglibrary.mit.edu/courses/course-v1:MITx+1...
- pas 4y ago
  Could you explain that a bit? How does that interact with this? https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices https://www.fda.gov/about-fda/center-drug-evaluation-and-res...
  - weezin 4y ago
    dodobirdlord's explanation is solid. Basically your link describes "generic" versions of a drug (aka a "brand" drug) with an expired patent. For new drugs they don't have competition like a normal market does because of these patents. To give a summary of the section of the course I linked the market forces for "brand" drugs is the willingness for payers (insurance companies/ governments) to pay.
  - dodobirdlord 4y ago
    After you file for a drug patent it takes 3-4 years to get approved. You also have to run clinical trials of various sorts, which take years, and then you need widespread marketing campaigns to ensure that doctors are aware of the new treatment. A rough rule of thumb is that it takes about 10 years from the point of filing the patent before you can actually bring the drug to market. Drug patents are good for 20 years from the filing date, so you have about 10 years to recoup all of your costs, recoup the necessary fraction of your amortized R&D expenses on drugs that didn't go anywhere, and hopefully turn some profit, before your patent expires and generic manufacturers undercut you. The result is that cutting edge drugs are extremely expensive for the decade or so after they first become available while the patent holder uses their patent-provided monopoly to set prices at the maximum that insurance companies and government health providers will pay. Your link is discussing the period of time after the patent expires and generic manufacturers get into the game, but the drug being discussed here with its $88,000 treatment cost is still in the patent-protected cost-recouping stage, where it's not subject to normal market principles of supply and demand because the supply side is a temporary monopoly.

georgeburdell 4y ago

This is why although I’ve almost got enough money to retire (~20x yearly expenses) but I’ll keep on working for another decade or two. All of these whiz-bang new treatments are going to be expensive. The most expensive medical procedure right now is a heart transplant at about $1M. Then there’s the $10k/mo for a nursing home

ta988 4y ago
Is that the real price of a nursing home in the US? Who can afford that?
- horsawlarway 4y ago
  Yes - that's not unreasonable for a full time care facility for something like dementia or Alzheimer's in the US (it's below what we paid for my grandmothers). If you're lucky - they have long term care insurance, and that covers most of the expenses for approx 2 to 10 years (depending on how old the insurance is - it's getting harder to find long plans, and they're all getting significantly more expensive as it turns out more folks needed them). Otherwise... you spend everything, and then your kids pay. We split my grandmothers down the middle - my mom's had insurance, we covered my dad's.
  - spywaregorilla 4y ago
    I'd rather just die. Throw a party. Tell my kids they're getting a ton of cash. Say good bye on happy terms. Vs. a miserable decay for everyone involved at huge expense. It's not worth it. Forget the money. The emotional toll is large and for whose benefit?
    - Merad 4y ago
      Even ignoring the fact that human euthanasia is illegal in most of the US, it's rarely that easy. Both of my paternal grandparents lived into their 90s but suffered from mental decline (different forms of dementia) and died as shells of their former selves. If you could have spoke to either of them at the end of their lives but with their full mental capacity, I suspect they would have said that they'd have preferred to die earlier rather than live through that decline... but in reality by the time anyone understood how severe their mental decline would become they were already well past the point that they could have consented to euthanasia. In theory you could presumably have some kind of system where a person of sound mind could that said, in effect, "if my condition declines beyond _____ then I want to end it," but doing so would be an incredibly touchy subject even if euthanasia was legalized. Unfortunately there is a very real potential for such a directive to by abused by people motivated by greed (gimmie that inheritance) or who simply don't want to deal with an aging relative who needs more help but hasn't reached the point where their euthanasia directive should be triggered.
      - LinuxBender 4y ago
        Assuming forethought one can set up a living trust. I have one. If I can no longer consent then a family member I designated can consent for me. It isn't without risk and requires a lot of trust.
      - nicoburns 4y ago
        > but doing so would be an incredibly touchy subject even if euthanasia was legalized. It would, but the alternative is to make people live though this mental decline as we currently do. IMO it would be well worth the risks to be able to ameliorate the end of peoples lives. My plan is to end my life well before I hit severe mental decline (not “if it gets worse”, with all the ambiguities that entails). If that cuts a few years off then a be it!
      - saiya-jin 4y ago
        It really, really doesnt have to be that complex. If people are religious nuts to believe suicide would bring them to some religion's hell (it won't, since it doesn't exist even if their variant of god(s) would exist), there are tons of ways to pass out rather quickly and not fulfill that criteria, and not bother anybody with the process (various car/train jumpers or suicide-by-cop doers whom I consider utter selfish a-holes). Walk out to a storm or blizzard not equipped for it. Go fight a bear or lion or crocodile. Go for a swim that you can't come back from. Do some high risk type of adventure that in high age is not even discussed. If you make it, great experience, move to next one. The list is literally endless and can be done in some form even by quadriplegics. It allows you to plan goodbye and closures, wills etc. The fear and pain and suffering is concentrated into such a tiny sliver of time compared to dying discussed its uncomparable. It just takes balls to accept that this is it, what mattered for you in life is over, and now its time to think about your closest ones and not yourself. Like a breakup, many will continue living in bad relationship since its a small amount of pain and evil every hour, every day. Instead of standing up and walking off to uncertainty and freedom.
  - toast0 4y ago
    Medicaid will pay for nursing homes (if medically justified) once you run out of money; but the per diem isn't that much. Apparently a lot of nursing homes will commit to accepting medicaid reimbursement for continuing care if you can commit to paying N years first. I've heard usually 2, sometimes 3. If you can swing that, your kids won't have to pay, or they'll pay for incidentals, but not the whole thing. There are homes that just straight up take medicaid, but they review poorly; it's not enough to pay decent staff at reasonable levels, so there you go. What I've heard about long term care insurance is you can't really buy a plan with useful coverage anymore. The old plans were good as long as the insurer remained solvent, but many didn't.
  - WalterBright 4y ago
    My father had long term care insurance. He got Alzheimers, and went into a nursing home, and passed after 3 years. The insurance covered most of nursing home fees. I did some math on the premiums he'd paid for the insurance, and the payout. It was a break even. In other words, putting the premiums into an HSA would have financially worked out a lot better.
  - greedo 4y ago
    "Otherwise... you spend everything, and then your kids pay." That's incorrect. With Medicaid, the recipient is require to spend down their assets to a small amount, then Medicaid will pick up the remainder. The recipient's children aren't on the hook for anything. Of course, they won't receive any inheritance since the estate of the recipient has been drained prior to Medicaid.
    - horsawlarway 4y ago
      This is wrong. Or rather, correct, but only in certain states, and for certain facilities. IMD over 65 is only offered in some states, and have strict requirements for facilities that accept medicaid (not all that many do near us). In our case, the waiting time was about 3 years for a room in the facility closest to us. Alternatively, there was an option about 4 hours away. Worse, both medicaid facilities we looked at were... bad. Frequent complaints about abuse, very high rates of staff turnover, very little stimulation for residents (one was basically a single old tv on the wall in a cinderblock room - it looked basically like prison). So yes - Medicaid will cover some costs in some cases, but really - the kids end up paying.
- MauroIksem 4y ago
  Yes it sounds crazy but when i was kid i worked as waiter at a nursing home and heard it cost 8k a month. That was nearly 20 years ago.
- qgin 4y ago
  You either have enough to pay or you pay until all your assets are exhausted to $0 and then Medicaid takes over.
  - GordonS 4y ago
    I'm guessing Medicaid isn't going to pay for the kind of nursing home that costs $10k/month?
  - ok123456 4y ago
    Medicaid will force you to sell your house once that happens.
- spfzero 4y ago
  It's the type of nursing home. If you are in an "assisted living" home, it is less. As a data point, maybe $5800/mo in CA, which includes food and various social programs.
qgin 4y ago
If you need a heart transplant, are you planning to self-pay that?
- georgeburdell 4y ago
  I have health insurance but I don’t trust some company to not dither when time counts
msandford 4y ago
The other thing you can do is setup a trust for yourself so that you're broke on paper long before the trust runs out of money. I don't know if it's ethical but it's legal.
- hughes 4y ago
  What's unethical is a system that completely drains a person's wealth for getting sick.
  - caddemon 4y ago
    Certainly this happens for procedures that should be cheap, and nursing homes are also a huge issue. But in the current discussion it's not clear to me that something like a heart transplant should be cheap. Development of a novel treatment can be very expensive and sometimes involves scarce resources.
    - trasz 4y ago
      In most developed countries heart transplants are literally free. That's what proper healthcare system is for.
      - caddemon 4y ago
        The US alone does ~2/3 of worldwide heart transplants, I think there is a tradeoff here. It's also not actually $1 million out of pocket for most people.
        trasz 4y ago
        Only because you are looking at the country total. Adjusted per capita, US has 7.6 transplants per million population, while eg France has 6.2. Which means, it’s pretty close.
        caddemon 4y ago
mkoubaa 4y ago
Pay lots of money to spend more of your life dying
robocat 4y ago
spend a decade of your life to possibly save a few years later? If you are “investing” your time for someone else, perhaps you could just give them your time directly instead?

ta988 4y ago

Something I saw in drug pricing conferences is that there is a push to price drugs according to how much personal and social benefit they provide and how much a person would be willing to pay to extend their life or resolve a condition. An extreme example for that model, if a drug allow a kid to survive and have a productive life it can be priced millions whereas a palliative drug could be much cheaper. This has nothing to do with research and cost of development anymore (if it even ever did).

klyrs 4y ago
I met a researcher once who was doing what appeared to be groundbreaking research on cancer care. He had this beautiful, tear-jerker story about losing his wife that cast a rosy, altruistic hue on his research. When he was asked what the device would cost, he cheerily replied "whatever the market will bear." That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. Dude was living off of government research grants.
- brigandish 4y ago
  > That's always stuck with me -- the problem with American healthcare is the American interpretation of capitalism. What should it cost instead? > Dude was living off of government research grants. Let's imagine his work comes to fruition. The drug is expensive but efficacious - is this not a good thing? Should the government have not helped fund this drug because now it's expensive? The alternative is a world without that drug and without as much incentive to produce the drug. I'm not sure that's a good trade.
  - chris_wot 4y ago
    I’m sorry, but that’s a non sequitur. The alternative is not that the drug wasn’t produced. It is that the drug wasn’t developed by private enterprise.
    - brigandish 4y ago

MauroIksem 4y ago

It's cheaper than other chemos..my mom has breast cancer and her chemo according to insurance cost 65k per infusion every 3 weeks.

Gordonjcp 4y ago
That's *insane*. Here in Scotland each dose costs the NHS at most a couple of hundred quid, plus about that again to administer. None of that is paid by the patient.
- sirsinsalot 4y ago
  It is crazy what the incentives do in the US. It is a bit like car insurance here, which keeps rising because insurance companies keep edging the cost of a claim upwards (courtesy cars at extortionate rates, repair, ...) because there's no insentive to keep costs down or not profiteer. With the NHS's buying power for drugs, they can get a little bit nearer a sensible margin from the supplier rather than the insane US costs underwritten by inflationary insurance.

dangle1 4y ago

Probably not. That's an average-to-low price for a monoclonal antibody in the US, and many people with chronic (non-cancer) conditions pay that price every few weeks to remain healthy under something like a health-as-a-subscription model.

qgin 4y ago

Price is only slightly related to production costs. It’s much more about all the work that goes into getting something like this from basic science to trials to approval (and all the other drugs that fail along the way). In the current model, pharma only stays in business by recouping all of the during the patent protected period of any drug that makes it to market.

adamredwoods 4y ago

This price won't drop, it isn't common enough and still in clinical trials.

yumraj 4y ago

I would actually expect the opposite. If the drug is approved then the price would go up several times.

bearjaws 4y ago

Chemotherapy for 3-4 months is around $200,000 - $400,000. You will not see a price reduction, if it doesn't require chemotherapy or significantly reduces the number of rounds of chemotherapy, this drug will cost $150k+ for full treatment. All of this assumes side effects are better than chemotherapy. Given chemotherapy care plans are some of the most arduous, it will be hard to be worse than chemo.

gruez 4y ago
> Chemotherapy for 3-4 months is around $200,000 - $400,000. Is that the american price or the "other developed countries" price?

mattmaroon 4y ago

Generally drugs that cure a condition cost MORE than the pre-existing treatments while under patent protection with no viable competitors. There’s only one source and you’d rather cure the disease with a pill so you’ll pay more. Market dynamics don’t come into play when there’s only one. If competitors appear or after patents expire it may get cheap, but the cost early on will have no relation at all to production costs.

weezin 4y ago

No, the prices for drugs don't follow the same fundamentals that a normal economic market does. If you want to learn more about pricing in healthcare the "Pricing, Value, and Ethics" lectures for this course is really interesting. https://openlearninglibrary.mit.edu/courses/course-v1:MITx+15.482x+1T2019/course/ https://openlearninglibrary.mit.edu/courses/course-v1:MITx+1...

pas 4y ago
Could you explain that a bit? How does that interact with this? https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/generic-competition-and-drug-prices https://www.fda.gov/about-fda/center-drug-evaluation-and-res...
- weezin 4y ago
  dodobirdlord's explanation is solid. Basically your link describes "generic" versions of a drug (aka a "brand" drug) with an expired patent. For new drugs they don't have competition like a normal market does because of these patents. To give a summary of the section of the course I linked the market forces for "brand" drugs is the willingness for payers (insurance companies/ governments) to pay.
- dodobirdlord 4y ago
  After you file for a drug patent it takes 3-4 years to get approved. You also have to run clinical trials of various sorts, which take years, and then you need widespread marketing campaigns to ensure that doctors are aware of the new treatment. A rough rule of thumb is that it takes about 10 years from the point of filing the patent before you can actually bring the drug to market. Drug patents are good for 20 years from the filing date, so you have about 10 years to recoup all of your costs, recoup the necessary fraction of your amortized R&D expenses on drugs that didn't go anywhere, and hopefully turn some profit, before your patent expires and generic manufacturers undercut you. The result is that cutting edge drugs are extremely expensive for the decade or so after they first become available while the patent holder uses their patent-provided monopoly to set prices at the maximum that insurance companies and government health providers will pay. Your link is discussing the period of time after the patent expires and generic manufacturers get into the game, but the drug being discussed here with its $88,000 treatment cost is still in the patent-protected cost-recouping stage, where it's not subject to normal market principles of supply and demand because the supply side is a temporary monopoly.